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UK retailers to re-visit advertising campaigns following ECJ ruling
Updated June 2011
Following a recent ruling by the European Court of Justice (ECJ) UK retailers and advertising agencies will be required to provide customers with more information regarding their advertised services or products. Failure to do so could result in action being taken by a number of regulatory bodies such as local Trading Standards, the Advertising Standards Agency and even the OFT.
Background
The case involved action by the Swedish consumer ombudsman against Ving Sverige AB, a Swedish travel agency, who offered trips to New York “from SEK 7,820” in a newspaper advertisement. The ombudsman contended that the advertisement was misleading to consumers as it omitted information required to be provided to consumers when making an ‘invitation to purchase’, such as information regarding flight times that would affect the price. Ving Sverige AB argued that the advertisement did not constitute an ‘invitation to purchase’, and therefore was not required to specify the following information.
What information is required?
The Unfair Commercial Practices Directive requires the following information be provided when making an ‘invitation to purchase’ unless it is apparent from the circumstances:
The main characteristics of the product e.g. name, size, material, make, model, colour, what the product is and what it does
The geographical address and identity of the trader
The price inclusive of taxes (including all additional charges that may be payable i.e. freight, delivery or postal charges)
Arrangements for payment, delivery, performance
Any complaints handling policy
The existence of any withdrawal or cancellation rights.
What is an ‘invitation to purchase’?
The ECJ held that an ‘invitation to purchase’ exists as soon as the product information and price advertised is sufficient for a consumer to make a decision whether or not to purchase the product. Notably:
There does not need to be an actual opportunity (e.g. order form), mechanism (e.g. direct reply to a text message) or means to purchase the product/service.
It does not matter if the advert is not made at the same time or in the same place as an opportunity to purchase the product/service (e.g. advertisements outside of retail stores).
Only an entry-level price is required (e.g. ‘From £30’)
A verbal or visual reference to a product/service is sufficient (e.g. photographs and radio advertisement)
What impact will this have upon UK retailers?
The Unfair Commercial Practices Directive is implemented in the UK by the Consumer Protection from Unfair Trading Regulations (CPRs). The UK view had previously been that an ‘invitation to purchase’ would only arise if it gave a consumer an actual means or opportunity to make a purchase. Current guidance on the CPRs gives examples of restaurant menus, newspaper order forms, price tags on products in a shop and interactive TV adverts through which direct orders can be placed. The ECJ’s ruling has now removed this element. As a result, most adverts are likely to fall within the definition of an ‘invitation to purchase’.
What should retailers and advertisers do?
Retailers and advertisers should therefore ensure their adverts contain the information listed above, and any additional information, to avoid misleading consumers. However, where this is not possible, for example due to space constraints, retailers can refer consumers to their website for full details.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
© TLT LLP 2011. TLT LLP is a limited liability partnership registered in England and Wales number OC 308658.
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